Carlton v. Bailey

Woods, J. It is a familiar and well settled principle, that if a part of the consideration of a note is illegal, as founded in a transaction which is forbidden by the law, no action can be maintained upon such note by the payee. Clark v. Ricker, 14 N. H. Rep. 44, and cases there cited. It has also been settled that the act of July 4,1838, which imposes a penalty upon any person who shall sell spirituous liquors without license, makes the contract of sale illegal. Lewis v. Welch, 14 N. H. Rep. 294. The reasons upon which that decision was founded, are equally conclusive of the illegality of the sale of such commodities under the statutes in force at the time of the transaction referred to in this case. Rev. Stat. ch. 117, § 6 ; Laws of 1849 ch. 846, § 5. It does not appear that the sale of the liquors without license, in this case, was made under any circumstances creating an exception to the general rule, which renders such sale illegal. But if the circumstances relied on were in fact of a nature which brought them within the peculiar knowledge of the party affected by the illegality of the transaction, he should have shown them. It has been so decided, even in criminal cases. The present case falls distinctly within that principle. If the plaintiff in this case had deemed it for his advantage on the trial, to bring to the knowledge of the court and jury, that the goods w'ere sold in particular packages; he should have made proof of the fact, and not have asked that it might be inferred. The burden of proof rested with him. Sheldon v. Clark, 1 [235] Johns. 513; Gearing v. The State, 1 M’Cord, 573; Apothecaries Compmy v. Bentley, Ry. & Mood. N. P. Rep. 159. The sale of liquors without license, as the sale in this case is admitted to have been, is by the laws of the State illegal, and no action can be maintained to enforce such contract. Whether the plaintiff, the indorsee of the note', was affected with the taint of the illegal consideration, depends upon the question whether he received it for a good consideration, in the usual course of trade, at a period so immediate after its date, as to justify him in presuming that its original consideration was sound, and that neither that, nor any matter intervening since, occasioned the note to remain unpaid in the hands of the party from whom he received it. A note, which is in terms payable to the order of the payee, is at any time negotiable ; but, if the transfer of such note, which is payable on demand, take place at a period so long after its date as might reasonably excite suspicion that it was not good, the party taking the paper is charged by law with notice of any unsoundness in the consideration, or any defence since intervening, which would have defeated an action between the original parties to it. The length of time that a note may remain due, before this suspicion of its soundness attaches to it, depends upon circumstances not very clearly defined. But it would be doing violence to the decisions on this point, in this State and elsewhere, if we were to say that as between mercantile men, not shown to be residing at a great distance from each other, and with no impediments to easy and frequent communication, disclosed in the case, this note was not overdue and dishonored at a period, as early at least, as that at which it was negotiated. From the 14th of December to the first of the following August is such a length of time for a note of this description tó remain due, that the purchaser might well have been put upon his inquiry as to the circumstances of its origin and its history, and be adjudged to have taken it with a full knowledge of them, and with all the disadvantages and [236] risks attending the purchase of dishonored paper. Franklin v. March, 6 N. H. Rep. 364; Emerson v. Crocker, 5 N. H. Rep. 159, and cases there cited. We are therefore of the opinion that the rulings of lie court were correct, and that there must be, Judgment on the verdict.